Document Index Portfolio Budget Statements Australian Taxation Office

Section 3: Budget Financial Statements

• Budget Statement of Revenues and Expenses (Budget Operating Statement)
• Budget Statement of Assets and Liabilities (Budget Balance Sheet)
• Budget Cash Flow Statement
• Capital Budget
• Non-financial Assets -- Summary of Movement

The budget financial statements will form the basis of the financial statements that will appear in the Australian Taxation Office 1999-2000 Annual Report, and form the basis for the input into the Whole of Government Accounts.

Budget Statement of Revenues and Expenses (Budget Operating Statement)

This statement provides a picture of the expected financial results for the ATO by identifying full accrual expenses and revenues, which highlights whether the ATO is operating at a sustainable level.

Budget Statement of Assets and Liabilities (Budget Balance Sheet)

This statement shows the financial position of the ATO. It enables decision makers to track the management of the ATO's assets and liabilities.

Budget Cash Flow Statement

This statement identifies expected cash flows from operating activities, investing activities and financing activities.

Capital Budget

This statement shows all proposed capital expenditure funded either through the Budget as appropriations or from internal sources.

Non-financial Assets -- Summary of Movement

This statement shows the movement in the ATO's non-financial assets over the Budget year 1999-2000.

Table 3.1: Budget Statement of Revenue and Expenses

CAPITAL BUDGET

Table 3.4: Capital Budget

Table 3.5: Non-financial Assets -- Summary of Movement
Budget Year 1999-2000

Total Additions

NOTES TO THE FINANCIAL STATEMENTS

Notes to the Agency Statements

Details of Agency items in the financial statements included in Table 3.1 to 3.5 have been prepared in accordance with Schedule 2 of the Finance Minister's Orders for 1997-98.

The budget statements and estimated forward years have been prepared to reflect the following matters.

Change in Administrative Arrangements

During 1998-99 administration of the Child Support Agency moved from the ATO to the Department of Family and Community Affairs. Administrative responsibility for the collection of Excise moved from Customs and Excise to the ATO.

Cost of Administering Goods and Services Tax

Agency statements for 1999-2000 and forward years include the estimated costs of administering the proposed Goods and Services Tax on behalf of the States and Territories of Australia.

Costs of Administering Other Tax Reform Proposals

Agency statements for 1999-2000 and forward years include a cost estimated for taxation reform proposals announced by the Government as part of A New Tax System or expected to result from the Government's response to the first recommendations made by the Review of Business Taxation.

Loss on Sale of Assets

Agency statements for 1998-99 include an estimated loss on sale of non-current assets of $38.343 million. This loss was incurred on the sale of assets purchased by the selected tenderer as part of the outsourcing arrangements for the ATO computer systems and services.

Notes to the Administered Statements

Details of Administered items in the financial statements included in Table 3.1 to 3.5 have been prepared in accordance with Schedule 2 of the Finance Ministers Orders for 1997-98. These statements incorporate a change in revenue recognition policy from prior years.

The budget statements and forward years have been prepared on the basis noted below and to reflect the following matters.

Recognition of Taxation Revenue

For 1998-99, 1999-2000 and forward years administered taxation revenue has been brought to account on a year by year basis where:

• the identity of the taxpayer is certain;
• the amount of the liability or refund is certain;
• the liability or entitlement to a refund has been notified to the Commissioner or advised by the taxpayer;
• there is an intention on the part of the Commissioner to collect the liability; and
• there is a legislative intent by the Commonwealth to change the basis or application of taxation law.

This recognition policy does not include the following item as revenue of the period:

• estimates of future collections or refunds from Individuals in respect of income tax returns to be lodged for the current financial year ended at 30 June;
• estimates of instalments of tax and final payments for companies due after 30 June;
• estimates of final amounts for Petroleum Rent Resource Tax due after 30 June; and
• actual payments by Pay As You Earn, Wholesale Sales Tax, Excise, Prescribed Payment Payers and Withholding Tax remitters for amounts collected or withheld in June but not remitted to the Commissioner until July.

Impact of Change in Revenue Recognition Policy

This recognition policy did not apply to the financial statements of the ATO as at 30 June 1998. The amounts noted below, included in the Administered balance sheet of the ATO as at 30 June 1998, have now been brought to account in the Administered accumulated results as at 30 June 1999.

Items Recognised as Reductions to Taxation Revenue

The following items are recognised as reductions (increases) to taxation revenue and not as expense:

• refunds of revenue;
• increase (decrease) in movement of provision for credit amendments;
• diesel fuel rebates and diesel fuel credits; and
• increases (decreases) in movement of provision for diesel fuel rebates.

Goods and Services Tax

Administered statements for 2000-01 and estimated forward years do not include as revenue the estimated receipts of the proposed Goods and Service Tax (GST). The gross receipts for this tax are not considered to be revenue of the Commonwealth for budgetary purposes.

Ancillary impacts of the GST on the operating statements and balance sheets have also been excluded from the administered statements except for the recognition of the proposed cost of administration of the tax to be recovered from the revenue otherwise due to the States and Territories.

Change in Administered Arrangements

An amount of $284.672 million, representing the balance of receivables due for Excise revenue as at the date of change of administered arrangements, has been brought to account as an extraordinary item for the 1998-99 financial year.